Writing an effective business plan
Whether you are a start-up or an established business looking to expand, being able to write a concise and focused business plan is essential for your company’s survival. Our top ten tips may help.
Writing a business plan can be daunting. However, it is an essential skill for any entrepreneur or business leader looking to increase their chance of survival.
Turnaround Solutions Top 10 Tips
1 – Audience perspective. The initial starting point for any business plan is to understand why you are writing the plan and who you are writing for. Are you trying to secure funding? Or expressing the future plans of the company to potential investors? If so the plan needs to be tailored appropriately, focusing on the areas of interest specific to the audience.
2 – Market research. Make sure you emphasise your awareness of the market in which you trade. Give reference to the market size, predicted growth and, if you are a business start-up, how you intend to penetrate the market.
3 – The competition. Understanding your direct competitors is vital. Are you in a particularly competitive industry, or a niche market? How will your company compare against the competition?
4 – Attention to detail. Keep the plan concise but don’t withhold information as your audience will need to be able to make an informed decision. When making assumptions, explain how you made them and keep them realistic.
5 – Stay focused. If a plan is being written for a potential investor, for example, keep it focused on what the investor will want to know, such as why is this a good investment opportunity? What are the returns for the investor? What are the timescales for investment? What is your company’s unique selling point?
6 – Cover the key areas. A concise plan should cover the key areas of information, such as Company, Products/Services, Market, Competition, Management team, Marketing, Operations and Financials. If your business plan is very text heavy, compliment your key areas with some charts or spread sheets for illustration.
7 – Financials. While expected costs can be reasonably predictable, assumptions on sales are obviously not always as accurate. However, it is important for the reader to see how many sales are needed to cover costs and how many you will need before you start breaking even.
8 – Executive summary. This is arguably the most crucial part of your plan: a summary of your entire plan that is usually contained at the very start. The summary acts as a key qualifier for any interested party – if the reader likes the summary they will read on, if not they are unlikely to read any more. Don’t write your executive summary until the very end of the business planning process and make sure you add a ‘wow’ factor to grab your reader’s attention.
9 – Review process. Once the plan is completed ask an independent party to read through and give you their opinion and possibly some constructive criticism.
10 – Implementation. Your business plan should be kept up to date and constantly reviewed. That way, it’s easier to monitor the progression of the company as the best business plan is one that will ensure the business is focused on what they set out to achieve.
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